Product Recall

Does owning responsibility of product failure has adverse impact on brand image ? A-Star: Maruti Suzuki : In a recent development that has created quite a sensation in the Indian car market, leading Indian car manufacturer Maruti Suzuki India has decided to recall its popular A-star model. While this may not result in the company losing a lot of money it definitely can leave a scar on its image as a manufacturer of reliable and sturdy cars. (In fact, this year has brought woes for all three leading Japanese carmakers-Toyota, Honda and Suzuki. Toyota Motor is reeling under a massive global recall that can cost the company in excess of USD 2 Billion. Honda recalled 8,532 units of its Honda-City, in India because of a defective power window). The news of A-Star recall may not go down well with the prospective customers of Maruti Suzuki. While Toyota cars have been recalled owing to accelerator and break problem, the issue with the A-Star is its fuel tank. The company is replacing a faulty rubber gasket in the small car manufactured before August 22, 2009, and sold in domestic as well as overseas markets to prevent any possible fuel leak. A-star has a global recognition and is exported to around 70 countries and is sold as “Suzuki Alto” in Europe, South Africa, Australia and New Zealand. In 2001, Maruti recalled nearly 76,000 Omnis made between August and December 2000 to get the fuel hose system inspected and, if found defective, have it rectified. In 2006, the company recalled 500 units of Zen. The company had also recalled some units of its hatchback Swift in 2005. “Its just not good to have recall one after the other… but one must not forget that the company is owning up to the problem. It is an exercise to build good public relations,” said auto analyst Hormazd Sorabji. “In the long run, such small things will not impact the image of the company.” Tylenol Poisonings : In 1982, McNeil Consumer Products, a subsidiary of Johnson & Johnson, was confronted with a crisis when seven people on Chicago's West Side died mysteriously. Authorities determined that each of the people that died, had ingested an Extra-Strength Tylenol capsule laced with cyanide. The news of this incident traveled quickly and was the cause of a massive, nationwide panic. These poisonings made it necessary for Johnson & Johnson to launch a public relations program immediately, in order to save the integrity of both their product and their corporation as a whole. Johnson and Johnson's handling of the Tylenol tampering crisis is considered by public relations experts to be one of the best in the history of public relations. Johnson & Johnson's public relations campaign was executed immediately following the discovery that the deaths in Chicago were caused by Extra- Strength Tylenol capsules. As the plan was constructed, Johnson & Johnson's top management put customer safety first, before they worried about their companies profit and other financial concerns. The company immediately alerted consumers across the nation, via the media, not to consume any type of Tylenol product. They told consumers not to resume using the product until the extent of the tampering could be determined. Johnson & Johnson, along with stopping the production and advertising of Tylenol, recalled all Tylenol capsules from the market. The recall included approximately 31 million bottles of Tylenol, with a retail value of more than 100 million dollars. This was unusual for a large corporation facing a crisis. In many other similar cases, companies had put themselves first, and ended up doing more damage to their reputations than if they had immediately taken responsibility for the crisis. Johnson & Johnson, on the other hand, was praised for their actions by the media for their socially responsible actions. The Washington Post cited many incidents where public relations programs at large companies failed in crisis situations. They applauded Johnson & Johnson for being honest with the public.